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The trials and tribulations of Theranos, the startup “Unicorn” of the medical technology field, continue to mount. For those who aren’t familiar, Theranos is a medical startup that claims to have developed a highly disruptive and revolutionary new means of conducting blood tests. These claims, however, were called into question by the Wall Street Journal back in October, causing shockwaves throughout the startup world. If a Unicorn like Theranos (with its most recent valuation reported at $9B) could potentially have such major issues bubbling right beneath the surface, what secrets are others hiding?

The story continues to get worse for Theranos. Earlier this week, the US Centers for Medicare and Medicaid Services delivered a strongly worded letter to the blood testing startup. According to the letter, the company's California facility poses an “immediate jeopardy to patient safety,” and the company has ten days to make changes and provide “acceptable evidence of correction.”

Theranos has hit so many roadblocks in recent months that many in the industry are beginning to question whether or not it will become the first Unicorn company to collapse. I’m not in a position to opine on the likelihood of this happening, but I can say that if that does happen it will be a sobering moment for startups and investors alike.

We brought this on ourselves

Silicon Valley is as narrow and incestuous a place as has ever existed. While there is undoubtedly a lot of talent and passion to be found, I fear that the spirit of opportunity that once existed has given way to the overwhelming influence of the Technocrati. The insularity and groupthink of these elites has led to a damaging culture of excess and intellectual dishonesty in the Valley.

Not too long ago, Jason Calacanis, an entrepreneur and investor, wrote, “When you’re at scale you will make money – it’s guaranteed!” While I certainly respect much of what Mr. Calacanis has to say, this sentiment sums up everything that is wrong with the VC community today.

Mainstream venture groups are so hungry for that early explosive growth that they encourage startups to pursue it at all costs. This behavior leads to runaway burn rates and highly questionable business models. Some of the smart and thoughtful venture capitalists have already started to recognize this.

Veteran investor Bill Gurley of Benchmark Capital Partners remarked back in mid-2015 that, “There is no fear in Silicon Valley right now. A complete absence of fear.” Everyone is trying to become the next billion-dollar company, the next unicorn. I once predicted that this single-minded pursuit would undoubtedly result in implosions that haven’t been seen since the dot-com bubble of the early 2000s, and I believe that we may be close to seeing that prediction become a reality.